Why do CDs cost so much?
When they were first introduced in the early 1980s, compact discs cost about $14 or $15 — almost twice as much as a tape or LP version of the same music. Record companies claimed that the higher prices were justified because the new discs were more durable and provided higher sound quality. The industry also argued that the high cost was partly due to the need to build new facilities to produce the digital discs and that prices would eventually fall. One 1987 Washington Post article reported that record executives believed that the price of a CD would eventually settle around $10. Twenty years later, production costs have come down, but consumers are still complaining about the cost of CDs, which now are priced at upwards of $16. The industry’s main lobbying arm, the Recording Industry Association of America (RIAA), responds that prices have come down. According to an article published on the RIAA’s Web site, “Between 1983 and 1996, the average price of a CD fell by more than 40%. Ove
